LNG Prices Soar Amid Hormuz Disruptions, Threatening Fuel's Future in Asia

The recent US-Iran war has disrupted Qatari liquefied natural gas (LNG) shipments through the Strait of Hormuz, causing a shortage in Asia's developing markets. This has led to a surge in spot market prices for LNG, with major non-China emerging market Asian buyers, India, Pakistan, Bangladesh, Thailand, and Vietnam, collectively spending US$7.4 billion on the fuel since the start of the war.

This exceeds the amount they spent on long-term contracts over the same period in 2025, which was US$3.1 billion. The increased costs threaten to tarnish LNG's reputation as a reliable energy source, especially given its recent track record of price spikes during conflicts like the Russia-Ukraine war.

Countries are now looking for alternative fuels and energy sources to reduce their dependence on LNG. Renewables such as solar and wind power, coal, nuclear power, or locally produced gas or piped supply are being considered as options. Fabian Kor, executive vice-president for Asia at SEFE Marketing & Trading, said that if prices remain high, 'LNG will have a problem competing with the alternative fuels.'